Over the past three years, the Australian Government has placed increasing significance on developing anti-corruption laws at both the domestic and international level. This article provides an overview of some of the legislation which govern this area in Australia, how corporations can be found liable and how to access guides to manage compliance.
Anti Corruption – Foreign Officials
Under section 70.2 of the Criminal Code Act 1995 (Cth) (Code) it is an offence in Australia to bribe a foreign public official.
The Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024 (Cth) (Combatting Foreign Bribery Act) came into effect on 8 September 2024, adding and repealing sections of the Code.
The purpose of the Combatting Foreign Bribery Act was to overcome the limitations of previous legislation, which were found too difficult to use in practice.
Significantly, the Combatting Foreign Bribery Act introduced a new offence at s 70.5A of the Code: a body corporate will commit an offence where it fails to prevent the bribery of a foreign public official.
Where an associate of a body corporate commits an offence of bribery of an official and does so ‘for the benefit or gain’ of the body corporate, the elements of the offence under section 70.5A of the Code will be established.
Absolute liability applies to bodies corporate that bribe foreign public officials for profit or gain, and the offence is punishable by the greater of:
100,000 penalty units ($330,000); or
3 times the value of the benefit incurred.
The Combatting Foreign Bribery Act expanded the scope of bribery offences to encompass bribery conducted for personal advantage.
The definition of ‘public official’ was also expanded to encompass candidates for public office, as opposed to exclusively applying to elected public officials.
The matters a Court will disregard in considering whether bribery of a foreign official has occurred were also expanded. Courts will no longer be able to consider whether:
any aspect of the benefit is customary;
any official tolerance of the benefit; or
any perceived significance of the advantage incurred.
Previously, the Code required a foreign public official to be influenced in the exercise of their official duties to constitute an offence. This concept has been repealed and replaced with a broader requirement to “improperly influence” a foreign public official, to be determined by the appropriate determinative body.
Notably for companies the offence under section 70.5A of the Code will not be found where the company has adequate procedures in place to prevent the commission of bribery of a foreign public official.
Anti Corruption – Domestic oversight
The National Anti-Corruption Commission (NACC) was established in 2022 to detect, investigate and report on serious or systemic corruption in the Australian public sector.
While the NACC deals with conduct within Australia, the NACC can, and has, run investigations jointly with Commonwealth agencies with international specialisations, such as the Department of Home Affairs.
The NACC operates under the National Anti-Corruption Commission Act 2022 (Cth)(NACC Act), which establishes four offences regarding corrupt conduct:
breaching public trust;
abusing office;
misuse of information; and
conduct that adversely affects the honesty or impartiality of a public official.
The NACC has investigatory powers to search properties, use surveillance devices, and compel the production of documents and information.
The NACC creates avenues for individuals to report corruption in relation to Australian public officials, staff members of Commonwealth agencies, contracted services providers, and parliamentarians and their staff.
The NACC Act provides protections for individuals who make a disclosure to NACC; they will not be subject to criminal, civil or administrative liability and their employment cannot be terminated even if a NACC disclosure constitutes a breach of their employment contract.
Ensuring compliance
In light of the operation of section 70.5A of the Code, it is crucial for companies to ensure their policies and procedures are adequate to prevent the commission of bribery of a public official.
In August 2024, the Australian Government Attorney General’s Department released a Guide on how corporations can develop adequate policies to prevent the commission of foreign bribery. Click this link to access this: https://www.ag.gov.au/sites/default/files/2024-08/guidance-adequate-procedures-prevent-the-commission-of-foreign_bribery.PDF
The Guide, provided by the Australian Government Attorney General’s Department, is not legally enforceable, and the policies and procedures of any company being charged will be assessed on a case-by-case basis. However, the Guide outlines six principles that can be employed in assisting the establishment of adequate anti-bribery procedures:
fostering a controlled environment to prevent foreign bribery;
top level management is responsible for developing and implementing effective anti-bribery compliance programs;
conducting due diligence and risk assessments to mitigate bribery risks;
ensuring effective communication and training for employees so they understand their company’s anti-bribery program;
adopting effective mechanisms to reporting suspected foreign bribery;
regularly monitoring and reviewing the anti-bribery compliance program.
Key takeaways
Under section 70.5A of the Code, it is an offence for companies to fail to prevent the bribery of a foreign official.
Companies can protect themselves from being convicted under s 70.5A of the Code where they can establish adequate policies were in place to prevent the bribery of a foreign official.
If you would like to discuss this further please contact Alicia Hill.
Alicia Hill
Principal
T: +61 3 9611 0180 | M: +61 484 313 865
E: ahill@sladen.com.au
